each contract is different but typically you are looking about a 15 day contingency period.
this would be for all contracts that DO NOT involve the sale of the buyers house - known as pending release sale.
if the contract is contingent upon the sale of a buyer property, the contract will typically have a 72 hour kickoff clause. this means as follows: seller keeps house on market and tries to obtain other offers, if another offer comes in that seller wishes to take then the seller notifies the first buyer - the one with the house to sell - that he has 72 hours to remove the sale of house contingency. if that buyers does not the seller "kicks out" the first buyer and can sell to the 2nd buyer.
let me know if you have further questions.
Some agents will replace the Sale Pending sign with a Sold sign once all contingencies have been removed. The contingency period can last anywhere from just a few days to several weeks, depending on the contract and the circumstances.
Interestingly enough, some agents don't put either a Sold or a Sale Pending sign up even after the property is in contract. They probably do this because they want potential buyers to call them. Even if the property they called about is no longer available, they may still be able to show them some other properties and sell another house!
I personally have worked with a buyer on short sales that took 5 months just to get an answer, and heard about cases taking much longer. While I'm sure a sale of home contingency accounts for many of these, short sales probably account for many more - especially outside of Palo Alto.
Last year I heard a statistic quoted that only 30% of the pending sales were actually going through. Not sure where we are now and particularly for Palo Alto. However, there are lots of things that delay escrows. Loans can take longer to approve as the underwriters are coming back with more "conditions to funding" that loan officers have to work through. Negotiating repairs can extend a contract. It takes time to obtain estimates and negotiate the responsibility and actual repair.
Mostly, we have any where from 30-50% short sales. On average, the banks take at least 30 days to respond. Some agents follow the MLS rules and list these as pending once an offer has been submitted to the bank for approval. Others keep the listing active as they continue to feed new offers to the lender, stating they do not have a ratified contract (pending sale) until the bank ok's the offer. Many of these short sales have the buyer walk by the time the bank gets back with the acceptance or counter and the home becomes an active listing again.
On average, I think it is taking a private seller 30-40 days to close escrow. FHA loans take about 35 days. It is very case dependent but definitely a sign of our times. Good question.
I think that the length of time a loan takes to close is another part of the changing lender market. I just closed on a transaction and it took from the begiining of December to the Beginning of February. The Buyers had strong credit scores and they were putting about 30% down. The lender kept asking for extension after extension on this transaction, without ever giving us any resaon except we need more time. In the end we finally appealed to the loan officer begging them to finish the process and get out loan docs as it was the Buyers anniversary and they very much wanted to be in their new cabin. That did work!
A year ago it took 3-4 weeks. I am now thinking I may increase the time I put in contracts to about 6 weeks. You can always hope to close sooner but my last experiance was that lenders just need more time these days. And it is really hard on both Buyer and Seller to have to change the closing date.
Thanks again. In this environment, having a transaction contingent on the sale of your own house is a pretty huge concession on the part of the seller. Is this a common contingency these days?
What if another buyer comes along and wants to make an offer on the house while it is in escrow? Is this seller committed to sell to the original buyer and prohibited from accepting other offers, even if it takes months for the original buyer to sell their house? If that is the case, the seller is in sort of a purgatory where they're forced to sit around waiting for another house to be sold.
Escrows can be as short as a week for a cash transaction to several years for large land deals. However, right now the average length is 30-45 days. Sometimes they are pending for a long time because the sale is contingent on the buyer selling another home. Sometimes it is because there is trouble securing financing, or there is an issue with the condition of the house. If you have a question about a specific sale I could ask the agent for you.